Foremski's Take: Nvidia needs an X86 capability so that it can better compete against Intel in key markets such as netbooks -- a fast growing sector.

It used to be a big project to create an X86 compatible chip, it required establishing a "clean room" where engineers could reverse engineer the microprocessor instructions. But with patent restrictions expiring it could be a faster process.

In today's world graphics processing functions are very important because of the proliferation of graphics user interfaces across nearly all computing devices, and also a wide variety of web browsers available for different types of computers. And video also plays a big part in the user experience. These all rely on graphic processors rather than general purpose microprocessors.

While Nvidia has some of the best graphics processors it can't sell chipsets that also include X86 technology, essential for Windows operating systems and Windows applications. Chipsets with X86 processing capabilities reduce production costs which makes them popular with manufacturers. Nvidia is locked out of these large chipset markets unless it can add X86 compatibility.

Hiring former Transmeta engineers indicates that Nvidia might try the approach that Transmeta used in developing low-power X86 compatible chips. It created a very high performance processor using what is known as a RISC architecture and then ran the X86 code in a virtual environment.

Nvidia, armed with X86 technology, could become a formidable competitor to Intel, and also Advanced Micro Devices in several key markets. It would be a very smart move.